Correlation Between Southland Holdings and Aecon
Can any of the company-specific risk be diversified away by investing in both Southland Holdings and Aecon at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Southland Holdings and Aecon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Southland Holdings and Aecon Group, you can compare the effects of market volatilities on Southland Holdings and Aecon and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Southland Holdings with a short position of Aecon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southland Holdings and Aecon.
Diversification Opportunities for Southland Holdings and Aecon
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Southland and Aecon is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Southland Holdings and Aecon Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aecon Group and Southland Holdings is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Southland Holdings are associated (or correlated) with Aecon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aecon Group has no effect on the direction of Southland Holdings i.e., Southland Holdings and Aecon go up and down completely randomly.
Pair Corralation between Southland Holdings and Aecon
Given the investment horizon of 90 days Southland Holdings is expected to generate 1.16 times more return on investment than Aecon. However, Southland Holdings is 1.16 times more volatile than Aecon Group. It trades about -0.13 of its potential returns per unit of risk. Aecon Group is currently generating about -0.23 per unit of risk. If you would invest 337.00 in Southland Holdings on November 3, 2024 and sell it today you would lose (32.00) from holding Southland Holdings or give up 9.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Southland Holdings vs. Aecon Group
Performance |
| Timeline |
| Southland Holdings |
| Aecon Group |
Southland Holdings and Aecon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southland Holdings and Aecon
The main advantage of trading using opposite Southland Holdings and Aecon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southland Holdings position performs unexpectedly, Aecon can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Aecon will offset losses from the drop in Aecon's long position.| Southland Holdings vs. Fluent Inc | Southland Holdings vs. Jacobs Solutions | Southland Holdings vs. 51Talk Online Education | Southland Holdings vs. Highway Holdings Limited |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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